STATE-OWNED Land Bank of the Philippines (LBP) has proposed that the President issue an executive order (EO) authoring the conversion of collective certificates of land ownership award (CLOAs) into individual certificates of title so that farmer-beneficiaries can use this as loan collaterals.
This proposal, made at the Cabinet meeting last week, was put under further study by the Office of the President, according to a reliable source, who requested anonymity.
“I suppose that LBP proposed the issuance of an EO for the conversion of CLOAs into [individual] certificates of title so that banks would be more comfortable in extending credit to farmers who could present clean titles to secure farm loans,” the source said in a text message.
Budget Secretary Benjamin E. Diokno has also confirmed the LandBank’s proposal to the BusinessMirror.
The proposal came up as LandBank presented to the Cabinet the Accessible and Sustainable Lending Program allowing small farmers to access loan facilities and increase their productivity and income. The program was launched by LandBank in July last year.
Despite this, Agriculture Secretary Emmanuel F. Piñol still criticized the bank last October for failing to provide loans to small farmers, as they ask for too many requirements from farmers.
Malacañang also said last week the President wanted LandBank to go to farmers instead of farmers going to the bank.
According to Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo, LandBank mentioned during the meeting that about 361,000 farmers currently have individual CLOAs who will be qualified for a bank loan. The President has also directed the inclusion of New People’s Army surrenderers in the next round of land distribution.
The problem with collective CLOAs is that the inner boundaries were not clearly defined, resulting in boundary disputes, according to a 2018 study by the Center for Agrarian Reform and Development.
Besides, no proper valuations for land tax payments can also be afforded by the local government since there were no subdivision surveys conducted in collective CLOAs.
Moreover, collective CLOAs resulted in low payments of real property taxes.
A large proportion of collective CLOA holders also do not have organized farmer associations and are, therefore, unprepared for collective land management.
The study also stated that payment to LandBank cannot be facilitated in collective landholdings since LandBank only accepts amortization payments from farmers in landholdings with validated land amortization schedules.
Therefore, the nonacceptance of payment by the bank causes farmers to feel some level of insecurity as they fear that LandBank and the local government would seize their land because of their inability to pay their obligations.
The discussions on improving the lives of farmers and fisherfolk followed the agriculture sector’s posting of lackluster growth last year.
Diokno earlier said the President expressed concern about the agriculture sector dragging down the country’s economy.
Data from the Philippine Statistics Authority indicated that the Agriculture, Hunting, Fishery and Forestry sector grew by 0.8 percent in 2018, slower than the 4 percent recorded in 2017. In contrast, Industry expanded by 6.8 percent, while Services rose by 6.6 percent last year.
In terms of share to GDP last year, the farm sector contributed the least, at only 6.8 percent. The country’s economy expanded by 6.2 percent in 2018.